California Real Estate 101: read before doing a refi

please read these:

http://www.loansafe.org/forum/refina...omeowners.html

http://www.sandiegopredatorylending.com/?p=33

and http://works.bepress.com/george_kuney/1/
What Your Lender and Mortgage Broker Didn’t Tell You:
George W. Kuney, University of Tennessee - Knoxville

Abstract
California Code of Civil Procedure § 580b protects a California homeowner from a deficiency judgment when the homeowner’s purchase-money lender forecloses upon the home after default. In other words, if the price the lender realized at the foreclosure sale is less than the outstanding amount of the debt, the homeowner will not be liable for the deficiency. Section 580b was enacted to discourage the purchase money lenders from over-valuing real property by requiring a lender to look solely to the collateral’s value for recovery in the event of foreclosure, and to prevent the aggravation of an economic downturn caused by increased debt exposure to homeowners during a depression. Section 580b’s protection cannot be contractually waived by the borrower.
The protection of § 580b only applies to purchase money mortgages. A lender may recover a deficiency judgment against a borrower who refinances an existing mortgage and later defaults, and a lender may recover a deficiency judgment with respect to any other non-purchase money loan, such as a home equity line of credit. If the protection provided by § 580b is not disclosed, borrowers often remain unaware of the anti-deficiency protection and that it is lost upon refinance. These borrowers risk losing protections which may prove substantial if the housing market slumps. Instead of having the right to walk away from the home, the refinancing borrower is liable for the full amount of the debt, including contract interest and fees and, if the debt is reduced to judgment, post-judgment interest at the rate of 10%.
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all this has been lurking at the back of mind due to discussions here and elsewhere........

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